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WEEKLY NEWSLETTER
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Lebanon
Index
Many international banks pulled out of Beirut in the 1980s. For
example, the First National Bank of Chicago sold its local
interests to local investors for US$7.5 million in 1982. But the
replacement institution, First Phoenician Bank, ran into liquidity
problems in 1984, when the managing director, Waji Muawad,
allegedly absconded with US$13 million of the bank's funds. Bank Al
Mashrek initiated takeover proceedings in 1985.
In 1985 Bank Al Mashrek also bought two branches of the British
Standard Chartered Bank. Banque Libano-Française bought the
Toronto-based Bank of Nova Scotia's local operation. The Moscow
Narodny Bank closed its branch, handing over its local business to
Bank Handlowy for the Middle East, the local subsidiary of Warsaw's
Bank Handlowy. The Chase Manhattan Bank and Bank of America both
closed their Beirut operations, the former handing over its
business to Banque Sabbag et Française pour le Moyen Orient. By the
end of 1986, only two United States banks were still operating in
Lebanon--Citibank and American Express International.
The British Bank of the Middle East (BBME), the second largest
foreign bank in Lebanon, resisted the trend as long as possible. In
1976 the bank's headquarters in Bab Idris had been the target for
one of the biggest heists in history. Losses of cash and contents
of safe-deposit boxes amounted to about US$24 million. BBME
recovered and maintained operations, however, and opened branches
in East Beirut as that part of the city became a distinct entity.
At the start of Amin Jumayyil's presidency, BBME's future appeared
promising. Its assets stood at L£1.3 billion (about US$315
million). But the growing insecurity of 1984, the kidnapping of two
senior managers, and a robbery in West Beirut in 1985 prompted the
management to close down four of its six branches in the Greater
Beirut area at the end of 1985. Thereafter, the bank maintained a
single branch in West Beirut, another in East Beirut, and a third
in Tripoli.
Data as of December 1987
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